Press Information Bureau

Government of India

Ministry of Finance

30-November-2012 17:57 IST

Small Industries Development Bank of India (SIDBI) has been permitted to avail of ECB for on-lending to MSME Sector as defined under the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 subject to certain conditions.

Government is not considering the utilization of such ECBs by SIDBI to divert into the Housing Sector. However, provision of ECB has been made for low cost affordable housing projects by project developers as well as for low cost/affordable housing units by NHB and Housing Finance Companies.

This information was given by the Minister of State for Finance, Shri Namo Narain Meena in written reply to a question in Lok Sabha today.

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DSM/RS/bs

External Commercial Borrowings permission allows on lending to MSME sector, excluding diversion to housing while housing ECBs remain available. Permission permits SIDBI to avail External Commercial Borrowings for on lending exclusively to enterprises within the Micro, Small and Medium Enterprises sector under the MSMED Act, 2006, subject to conditions; such ECBs must not be diverted by SIDBI into the housing sector, while the ECB framework nonetheless allows financing for low cost and affordable housing projects and units when raised by eligible project developers, housing financing institutions, and housing finance companies under applicable conditions.